High-Severity Claims: Is the Sky Really
the Limit?
David Pranklin
9 October 2014
Basic Principles - UK
 The general aim of an award of damages in tort is to put
the injured party in the same position as he would have
been in if the tort had not occurred
 Cost to defendants irrelevant
 Claimant can spend or invest damages in any way he or
she sees fit
 Compensatory awards
 Aggravated damages rarely awarded
 Exemplary or punitive awards not available in clinical
negligence
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Recent History
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Discount rate
Damages Act 1996
Periodical Payment Orders (PPOs)
Thompstone v Tameside 2008
Peters v East Midlands 2009
Helmot v Simon 2012
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Damages
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Law Reform (Personal Injuries) Act 1948
Future care
Accommodation
Loss of earnings
Lump sum settlement
Periodical Payment Orders
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Reserves
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NHS Litigation Authority (NHSLA)
Financial year 2012/13 - £23.6bn ($38bn/€29.4bn)
Financial year 2013/14 - £26.1bn ($42bn/€32.5bn)
New obstetric claims 2013/14
11% in number of new claims notified
35% of reserves in respect of new claims
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Examples
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10 year old girl arterio-venous malformation
Polymerised glue injected instead of contrast medium
Lump sum payment of £2.8m ($4.5m/€3.5m)
PPO - £383,000 per annum to age 19
PPO - £423,000 per annum thereafter
Claimant alleged life expectancy to age 64
Defendant contended life expectancy 23
Total cost to 23 - £6.025m ($9.7m/€7.5m)
Total cost to 64 - £14.8m ($23.8m/€18.5m)
© MDU Services Limited 2014
Examples
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Brain injury
Age ten at settlement, life expectancy to 50
Lump sum £3m ($4.8m/€3.7m)
PPO - £130,000 to 19, £200,000 thereafter
2.5% discount rate - £7.5m ($12.1m/€9.3m)
1% discount rate - £9m ($14.5m/€11.2m)
-1.5% discount rate - £13m ($20.1m/€16.2m)
© MDU Services Limited 2014
Who’s at risk?
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NHS – Obstetrics
MDU – General Practitioners
MDU record – neurosurgeon
Plastic surgery case
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The way forward?
 Discount rate review
 Fair compensation campaign
 Reform how awards are calculated
 Caps on awards for future care
 Caps on awards for loss of earnings
 Who looks after the uncompensated?
 Is the cost to society really irrelevant?
© MDU Services Limited 2014
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